[jdasdf]

Just a quick note here, selling puts is actually the worse of the examples you could have mentioned, because you can simply use it as a way to maintain an open order for the stock at a given price while getting paid for it.

Selling calls would be a better example, since in that case losses are potentially limitless.

[skrtskrt]

True, but a casual investor is less likely to sell naked calls with infinite loss.

When they sell covered calls and lose the bet, the only loss is missing out on the run up of the stock.

I mostly just used the put example because it maps better to compare to a buy and hold strategy - good if market is up, bad if market is down.

It's also a well-known pennies-in-front-of-steamroller strategy that hedge funds have gotten very publicly burned on before, so anyone interested could research more.